want for success. we'll be talking about canada tomorrow on the show. >> 51st state, soon. >> thanks for watching "street signs." >> "closing bell" is next. hi, everybody, we enter the final stretch, i'm maria bartiromo, the bulls are back in town. >> yeah, four month highs right now. we're seeing a lift after german chancellor talked about her support. she's backing it once again. here are the major averages, at the highs right now with a gain of 92 points. the nasdaq higher, cisco among the gainers today, up 32 points on the nasdaq, and the s&p is up

10 points at 13156. >> a good day for the broad market but not facebook. they're down another 5%. so investors got a chance to unload some 270 million shares of the stock today. the stock down 6% now. first, we may be up today, but the consult of equity is dieing and you can say goodbye so the days of consistent annual returns. they are a thing of the past. according to pimco's cofounder, bill gross. what is behind the bond king's fall? he joins us now. >> welcome back, bill. >> hi maria, hi bill. your call is witnessing the death of equities, why death? >> not death of equities, but the death of the quality of equities and the quality of

bonds basically over the past 10 to 20 years that suggested that double digit return social security what we were due. all i'm suggesting going forward is that the consult, which was a boomer type of consult, a 20, 30, 40, 50-year-old consult, in terms of generational boom, that that should be more realistic, they should expect less than 10%. they should know that corporate profits as a percentage of gdp, and corporate taxes are at record lows, and therefore going forward double digits is probably not what they're going to receive. so just lower your expectations. equities are still alive, but the skult of equities in terms of double digit return social security dieing. >> i want to ask you what in a means and how somebody should invest. you wrote this back in late july, and people who have seen it now, it's a well written

sentence, like a once bright green aspen turning to yellow and then red in the colorado fall, investor's impressions for the long run have mel lowed as well. to me that describes the perfect time to buy stocks, am i wrong? >> it might be, but it also goes on to say, bill, that from a generational standpoint that boomers who are 55 and 60 can't afford to take equity like risk which is what they have seen over the past ten years, and generation x and generation y, like i suggested, don't like the stock as it goes from 40 to less than 20, perhaps are influencing the trend going forward. so you need a buyer and what you're suggesting is they should be buying and i'm not suggesting they shouldn't, but i'm suggesting as well that from a

generational standpoint their discouraged and will remain discouraged. >> i think that's a great point. when you look back at the 90s, there was a consult like attitude. you had to be in stock. if not stocks, then what? what asset class in your view is going to really deliver the best returns for long term wealth creation. if not equities, then where? >> i think ultimately, maria, real assets, i'm not suggests that investors go to the bond market, i think that bonds return 2% to 3% a year and stocks return 4 to 5. so that is relatively low. real assets, commodities, land welcome housing, they're going for probably a better bet because they have been run down souch and not run up as much as

other financial assets have been in. >> so you think that will do bet ere than other classes? >> i think so, we had 20, 30, or 40 years of an asset boom and interest rates have come down from 14.5% in treasuries to now 2.8%. as a person point, bonds and equities, financial assets reached a dead end in terms of their significant appreciation potential. so i'm suggesting let's look to other asset categories astutes for financial assets. >> we have seen a rise as you well know in long-term rates. this week and partially last week, could paul ryan be partially responsible for the sell off? >> yes, positive results as

maria mentioned, yes central bank easing from the ecb, and the swiss national bank and the fed, yes an improving u.s. economy. those are reasons why bond yields have gone up, but let's also think about, perhaps, and i think it's interesting, not knocking paul ryan because i'm a registered republican, in any case, to the extent that he is criticized ben bernanke in terms of the dual mandate, focussing on employment in addition to inflation, you know, going forward, if you know given a 50/50 chance of him being the vice president going forward, perhaps the selection of a future fed chairman in january of 2014 might be related to a hard money type of outlook. that's ultimately good for bondholders but it means higher interest rates.

perhaps there is a twist there in the last few days. >> all right, bill. ready? >> what do you think about this ticket thing? >> i don't want to be a political pundant. i think both sides are subject to money and super pacs. it's a government of the super pac for the super pac, i say get the money out of politics and get a real choice going forward. to me they're both the same. >> a tall order, william, always good to see you. bill gross joining us. we have thomas lee with us along with michael pimto, and rick santelli. you have to make calls on equities, the chief strategist

there at jpmorgan, what's your idea about the death of the the consult. >> first i have to say we have to remember that the world lowers it's expectations. it's closer to 6% total return. the only way you achieve that is having a good exposure to equity markets. bill says he expected stocks to double the return of bonds. it's still below the historic norm going back to 1912 or something like that. he thinks it's going to be more like 4%. do we have to lower our expectations -- >> my only question is everyone's informations are built around a foundation of flow growth. we now economic forecasts are the least reliable. if we look at the market expectations of 1.5%. ly take the over.

a -- i will take the over. >> so you're still keeps expectations up. >> michael, what about you? >> one should be very careful about making prognostications going out ten years. i would say let's see what happens first of all with the election. if you have a fiscal monetary contraction, if romney and ryan get elected, then i expect you to have a deflation fair depressi deflati deflati deflationary recession. if bernanke stays at the helm and we have a quantitative easing and they cease paying interest on excess reserves, you have increase in the money tlie. so you have to stay tuned, you can't just make these broad call

that's go out over a decade. >> okay, so your broad call on the market, what kind of a return to you expect from the s&p 500. let's call it five to ten years. >> again, it all depends on what mac row economic environment is. is ben bernanke getting thrown out of office? will our depression occur and be allowed to purge the system. then i would say that we're going to have maybe one or two years of very negative returns in the stock market. on the other hand, if we keep printing money and borrowing a trillion dollars plus, you will have a stagflation fair environment going out as far as the eye can see. >> we have construction going on here. nobody is hurt, move along. rick san ttelli, the news of th

day, mario draghi doing whatever it takes, angela merkel, what do you make of that? >> i don't care how many people give us instructions for the best way to turn strong, i'm still not buying it. i still see insolvency as insolvency. as far as mr. gross's comments, i agree with them. i said new equalibrum. if ryan is talking about stocks the way he is and blaming ryan for the increase in rates, why would stocks not have gone down. it makes no sense. >> markets aren't making a whole lot of sense anyway right now. >> i think they are. >> thanks. breaks news on facebook. let's get to kayla tausche.

>> excel partners is unloding 50 million facebook shares to it's own investors. these are shares previously locked up but will change hands to aloun excels own limited partners and their decision to sell or hold the stock. they held more than 144 million shares. it amassed as one of the earliest investors in the company. of course only a fraction of those 144 million shares are unlocked as of this week's expiration, but i'm told that the 50 million share transfer is the bulk of that amount that is unlocked this week. while not all investors getting shares will be sellers, this block is worth roughly a billion dollars at the stock price and could be today's volume. if 50 million of those got sold, that's roughly a third of what we have out there maria.

>> kayla tausche, thank you so much. we'll keep following that. we have 45 minutes until the closing bell sounds for the day. >> you think we're finished? we're just getting started. coming up, gross overstatement? the head of pimco says stocks are dead. what is the ceo of janis say? and taking ryan to task. peter orzag says the budget is akin to a doctor amputating a healing arm. sound harsh? wait until you hear what he thinks about the budget plan?

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all right, on a day one the dow is up 100 points, dollar tree is lower, what's going on? >> bill, thank you, look at the interday, it was gapped down at the open down about 23%. some are saying it's a suspicious move, and it has climbed higher and higher. you have to go back to the results because their eps and revenue guidance are weak. you see the early move, people think there was a fat if i think thaer did that, but it crawled almost all the way back. >> brian, thank you, our next guest is a true believer in equity markets. regardless of what bill gross says, and that's his former

boss. they just sold a 10% to 15% to japan's life insurance company, and joins us is the ceo, richard wow. bill gross who you worked for at pimco is stocks and the consult of equities is dead. 85% of your assets are in equities, what's your take on this assessment. >> i think he is terrific, and i respect him a lot. i think it's challenging to move from global macro environment. in the past i think the correlation between equity performance and gdp growth has been quite low. i expect a lot of your investors will be surprised if you go back to march of twine, they have

rebounded since that point. so, i think there are a lot of investors who are missing a strong market. and this doom and gloom we get pounded with are causing investors to miss an opportunity. >> and you're seeing investors out of it. what are you seeing in terms of clients? the retail seeing to have left this market. where are you seeing the flow of money these days? >> investors are scared. they're staying heavily invested in cash. that's good for our fixed nm business that is about 17% of our assets. >> sure, let's look at assets under management. they have been disappointing.

assets under management are down. what's the strategy, what will you do to reverse it and get inflows back into your funds. >> the first thing i would like to talk about is the wonderful joint venture. that deal has the prospect of creating a lot of shareholder value for our shareholders. they're going to the open market and buying 20% of our shares and being a strategic and important partner. they're going to help us expand in tokyo and through broader asia pacific relationships, and they're giving us $2 billion of their money to manage. this is a huge win for shareholders, it creates a lot of shareholder value. >> so do you think there are other opportunities to expand in terms of increasing assets under management? is this part of a larger strategy or a one off deal in terms of wanting more capital

and expanding the firm. what is your vision? >> thank you, that's a great question. we're excited about diversification. we need faster growth in our fixed income business, nonu.s. business, and we have opportunitied in u.s. institution to grow that business, and internalally we refer to that as intelligent diversification. >> do you think we'll see more deal flow in financial services? what's your take? there's been a few dealing recently, actually. >> i think you will continue to see a modest amot of strategic deals. i think all of us are trying to position ourselves for future success and looking at more

strategic deals than financially available ones. >> do you need to stick to being a growth stock, or do you need to diversify even from that? in terms of your own asset mix? >> i think to generate the best returns, we need to be more diversified. not just offer growth stocks, but also value stocks, defensive and offensive kinds of products. we have a market leading quantitative business, and we're doing some exciting new things in alternatives and some solutions and product that's will be coming out soon and are exciting for our future. >> all right, we'll be watching, good to have you on the program, thank you very much. we'll see you soon. rally continues here, the dow up 94 points with 40 minutes left on the day. red flag for america's

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welcome back, facebook continues to lose face and value today. insiders are getting their first chance to sell the stock since it went public back in may. investors should not expect the selling pressure to let up any time soon, bill? >> that's not the only stock we're watching go lower, walmart is all about low prices, but it's not supposed to be about a low share price. that stock is down on an otherwise up day. this after the world's largest retailer reported earnings that disappointed wall street. will share prices go lower? or should investors take advantage of this one-day sale if you will and buy walmart shares. we have ennis tanner, and dan bender, dan, what do you make of

the sell off today, it's had a good run here lately. >> yeah, i think it's justified. the company missed the sales expectations and i think you need to seem them come in at the high end or better. you're pricing in a lot on the quarter and it just didn't come through. >> what it was a ten year high on wall street? >> yeah, and in fact, everyday low prices has been a great proposition. if you look at the 20 year chart, the previous high was all the way back in the bull market of 2000, and it really made a range between $45 and $65 for ten years. in july of this year we saw it break out of all time highs and it was very clean. it got all the way to $75. this is a healthy pull back to me. if you look at the five year chart, the stock, above $70 i think has made a bit of an extended rally, but anywhere

above 71 or 70 i think is a good entry, so i'm a buyer of the selloff today. one other thing i would add is if you look at the end, you can say the valuation isn't stretched. >> technical analyst looking at the fundamental stuff, would you buy this, dan? >> i think the stock should trade between 13 and 14 times, that's $69 to $74. >> so you're a hold if i read you right at this point snp. >> yeah, i think it's a hold, it will fluctuate, but it's blow planned, and walmart and the

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welcome back, our next guest knows a thing or two about layouts ab and has something to say about paul ryan. ether orszag saying paul ryan is thoughtful, handsome, and misguided. >> he joins us right now. peter, we were just talking, are

you voting for romney-ryan or not? >> i guess not. >> we're not too surprised about that. >> shocking newsflash. his spending could come back to a historical percentage of about 20% of gdp. does that work for you in this environment? >> but hold on, it's all a huge magic asterisk. in current law it's supposed to go to 2% to 4% gdp. paul ryan assumes it will go to 1% gdp by 2040. there's no plausible way that by block granting you will cut the costs by 75%. it's an assumption. >> everything is as this point, right? >> no, you want specific policies to get to reasonable

outcomes. why stop at 1%. why not assume they be at 1%. you need specific steps to get that there. >> a lot of people assume that it won't cost anything. >> i'm not debating whether or not forecasters are always accurate. what i'm saying is there is no policy behind it. he saying we'll leave medicare up to states. how do you get there, peter? how do you make these costs go down? >> well, we have had some progress recently and the cost have to slow down significantly. over the past year they have not risen faster than income has, and that's good. i think the single most important thing is to continue focussing on hospitals and doctors, what do they recommend for you because most of the costs in health care are the high costs and most of us will follow what our doctor,

hospital, or practitioner are recommending, so you're only having a very small effect, and mr. ryan wants to move in a different direction, just plunk everything down on consumers leading the way, and when most people are in a ambulance going to the hospital, they're not thinking about what hospital will cost them $50 or $100 less. >> ryan has been the attack of the off the cliff add by your former boss, does that help the national conversation on something that we needs to be addressed? >> what i'm trying to do is stay focused on two visions here. one is focused on altering incentives, and the other is focused on empowering insurance companies an consumers. >> the bottom line though, the

fear factor for a lot of elderly is they will pay a lot more for health care coverage out there. either way, isn't that going to happen anyway? >> i think everyone can agree we need further changes. there's a article i o co-authored tha out a lot of other steps we could take. look, the congressional budget office with regard to the only ryan plan they have fully evaluated showed that for medicare, if you look at the consumer costs combined, it significantly increases the total, relative to this already b bad path that we're on. >> peter, let me ask you about the fiscal cliff issue. the fault lies with congress, they left for five weeks vacation, and we have the tax cuts expiring and the spending programs expiring. what do you think is the answer

here? >> the first thing is i agree with everyone saying this is not helpful. we have an economy going through a hard time of very slow growth, and having the uncertainty of how we will resolve the fiscal cliff is not helpful. there is substantive differences about the path forward. i'm not fully in either camp. i don't know how good of an idea is it for me to put my own ideas out there. >> will we see a recession in 2013? that's on a lot of people's minds right now. >> it depends on if we're bungy jumping or sky diving. if we go over and we have no clear path for how we get out of it, that would make vur chully certain that we reenter a recession. >> i realize who i am asking, but the most recent gallup pole

has romney winning. >> i'm not the right person to ask that. >> he didn't say it's a, you know, it's a shoe in, so i think right there it it telling you something. >> they said a little over half. >> get a long time before november 6th, a lot could happen. bether, thank you, best to your family. >> thanks. >> thanks peter, see you soon. >> he has a great family. he just happens to have a great family we know about. 20 minutes before the closing well here, the dow is up 90 points. >> the stock market getting out of that flat range today, will it hold? facebook shares punks as

people get their first chance to sell. some people say it will get a lot worst than that stock, we'll talk about that coming up. before we go to break, the dividend, which social media stock has fallen the most this year. facebook, groupon, or zynga? the dividend pays off after the break. [ male announcer ] more power. more style. more technology. less doors. the 2012 c-coupe. join mercedes-benz usa on facebook for the best summer sweepstakes. so, what's the problem? these are hot. we're shipping 'em everywhere. but we can't predict our shipping costs. dallas. detroit. different rates. well with us, it's the same flat rate. same flat rate. boston. boise? same flat rate.

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just before the break, we asked which social media stock as fallen the most this year? facebook, groupon, or zynga? now the pay off, groupon which wiped out about 70% of it's value year to date. the markets may be higher today, but not facebook. shares getting hammered today, and julia boorstin has more. >> yes, facebook shares are now below $20 a share. this is the first lock up and expired on $271 million shares. now trading volume today spiked more than $140 million shares have changed hands today, that's

over 270% higher than facebook's ten-day average. we'll now what insiders are selling by the end of the day monday, that's when the form four filings are due to the fcc. >> there it is down, and coming up, we'll hear from one top tech analyst that says this facebook flop could go on for quite a bit longer. in the mane time, u.s. markets rallying today, the volatility index close to the lows for the session, but if you look at the volatility curve, this is something bob pisani has been highlighting because of the fear factor. so to talk about that, chris, what are people so afraid of? >> it's the summer months, it's all about europe, but it was a

potentially global recession. the fiscal situation in the united states and a pretty big political debate. you put all of that into the equati equation, and people expecting bad incomes. >> let's not forget the fed, right? >> right. >> as you have been pointing out, bob, the vix today, the cash vix, is very low, as you move out -- >> yeah, and i don't give trading advice to people, but we have volume at four year lows, value ti ti at fei year lows, caps at four year highs, going long is kind of a no brainer here, right? >> absolutely. i don't know if we're all going to agree about the right volatility index, but if you look at five year lows, and what's happening in the ten-year treasury yields, the small great rotation is on. >> we say that, but how do you do that? do you buy -- do you invest in

etfs? >> yeah, you have to be careful. you could pull back a little bit of the profits you made overall. people talk about risk management and things like that. it's very hard to do, there is nothing wrong with taking some profits and expecting things could get dicier. >> yeah, we have a market that is up not on fundamentals. revenue was anemic. i want to get your take on these numbers. the second quarter growth of under 1%. in the third quarter it's expected to go down, and in the fourth quarter they're expecting s&p easternings to go up 10% and they think they will go up because they're expecting a it 2% gain in financials. in what world will we see earningings grow financials 22%. >> they're absolutely too high. i think to roll it up ul, the

numbers for the s&p, and they're somewhere near 107 or 109, they have further to go now. we're at about 100. you put a multiple on that and that's where we are today. the market is tired and the only thing that takes it higher here is expansion. >> do you want to sell into it? >> we would like to take profits. >> why? >> across all sectors. the consumer digressionary has done well. be careful -- >> all year, high dividend yielders are the ones people want to go into. do you think it's time to take profits. >> yes, din equities, it's the dividend growers. >> cisco raids 75% yesterday. >> it's a lot in technology, and

that's a longer term story. there's still a lot in the industrial sector. it's not broad market exposure we're talking about here. it's really finding the beneficiary yars of the big themes. >> if europe calms down, could you argue for expansion or earnings growth if europe calms down. >> that's a big if. >> look what's happened now, quite in the last two weeks. >> they're getting ahead of themselves. europe is a value trap right now, but the big exporters that switch from the u.s. large caps, potentially first quarter next year, benefitting from a week euro is important to watch. >> see you on the count down in a few minutes. thanks, ten minutes before the closing bell sounds for the day. the market holding on to gains and up now about 83 points. >> would you invest your money with a man whose former firm lost $1 billion in investor

funds? we'll have that story coming up. >> and a new report finding more than 21,000 former federal workers will collect sixth figure pensions for the rest of their lives. is this exhibit a for where the government is going broke? why not take a day to explore your own backyard? with two times the points on travel, you may find yourself asking why not, a lot. chase sapphire preferred. there's more to enjoy.

there are reports out that john corzine will not have criminal charges despite misplacing $1 billion of investor money. >> and now that the smoke is clearing, he is planning his next career. according to dealbook, he is considering opening a hedge fund. who would give ham dollar to invest. where is the money? the money is gone, a billion

dollars. >> they're still questions mid-level and high level executives and they're looking very closely at the bookkeeper in chicago, and she is not cooperating at this point. we can get into the weeds, but it is interesting that john corzine is considering his next career move that would have to do with a hedge fund. >> a lot of people say he gave the order to move the money. terry duffy said he made the decision to move the money, and now there is no investigation -- >> that bha the case, but there are no charges. >> former governor, senator, former ahead of goldman sachs. >> he is an optimistic guy, obviously. >> stick around, we'll have more thoughts on this story and john

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okay, four minutes left in the trading day, let's get right to it if you're joining us, a good rally today, lighter volume, coming off the highs, about a 100 point gain, and now it's a 75 point gain on the dow jones industrial average. the s&p still holding above 1400. this is well above even the most optimistic forecast for the end of the year for the s&p up another nine points today at 1414. i want to talk about the rise in the long-term yields, and i think this has something to do with it as well with food inflation going higher, the drought in the midwest, grain prices going higher, wheat up another 1.8% today.

a gain of almost 2%, and that wheat, corn, soy beans and all of those have been going higher and yields have been going higher as well. up to 1. 83%. also the price of oil continues higher, a cane of almost 1% now. it was up at one tat $95.13, but even more brent, the london contracting, this is the spread for the whole year year to date, and we're getting back to the highs, the difference between london and new york crude is back to about $20 a barrel right now. one quick look at what was strong today. the technology, cisco leading the way there after declaring that higher dividend. warren myers of dmc securities thinks this rally is getting tired, do you agree?

>> i think you see yielding climbs and yields coming out of that market, so we had a little run up there. i also think we had a push up due to this being an expiration week. this rally cld take a breather and start to settle back in a bit. >> what about the rise in yields and the inflationary implications with the ride of grains and everything. >> certainly some of it is, but i think we're about to hear the word transitory. it is sticky. you're about to hear this very soon. far so much debt in the world. most of it is outside of the united states. but as it relates to just pure debt and what we have towork on, deflation is a word we will hear a lot for the next many -- >> deflation? >> yes, so sticky, probably not. the rotation from fixed income into equities is about what

warren discussed. it's a little tired, we expect a pull back. on that larger pull back, the u.s. is in the cat bird seat and we would be all over it. >> we want to own the company that's will benefit from lower energy transfer costs from coil to liquefied gas. >> i think you will know first thing in the morning. we were up 100 points a few minutes ago and now it's 77 points. >> a little move like this doesn't mean up. >> the volume is it just august right now? >> it's a con bim nation, we've been on a downward trend. >> warren myers, good to see you there, heading toward the close just off the highs of the day, and we